Reid Company is considering the production of a new product. The expected variable cost is $24 per unit. Annual fixed costs are expected to be $892,500. The anticipated sales price is $75 each.   Required Determine the break-even point in units and dollars using each of the following: Use the equation method. Use the contribution margin per unit approach. Use the contribution margin ratio approach. (Do not round intermediate calculations. Round "Contribution margin ratio" to 1 decimal place. (i.e., 0.234 should be entered as 23.4))

Question

Reid Company is considering the production of a new product. The expected variable cost is $24 per unit. Annual fixed costs are expected to be $892,500. The anticipated sales price is $75 each.

 

Required

Determine the break-even point in units and dollars using each of the following:

  1. Use the equation method.

  2. Use the contribution margin per unit approach.

  3. Use the contribution margin ratio approach. (Do not round intermediate calculations. Round "Contribution margin ratio" to 1 decimal place. (i.e., 0.234 should be entered as 23.4))

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